Hey Market Pilot,
What do we do during this time of quick drops and fast rallies if all you are interested in is trading to the long side? Well, you look around and build a list of names that could be the leaders on the next leg up.
One way that I like to do that is simply by looking at charts and observing which tickers have held up the best during the market decline. This would imply they have relative strength and are likely to be the next solid mover when the market is finished correcting.
Below is what the S&P 500 (SPY) is doing so you can see the differences in the few stocks I mention.
Then (pictured below) is Snapchat (SNAP) which has essentially gone sideways while the market moved lower.
Snowflake (SNOW), pictured below, had a little dip to daily 50 simple moving average (SMA) and rebounded with strength.
Airbnb (ABNB), pictured below, was looking a lot like SNOW.
Match Group (MTCH), pictured below, is hanging tight since it was added to the SPY.
And lastly, Xilinx (XLNX), is also flagging to the daily 50 SMA and moving up.
Though this is not an exact science, taking a look at how these tickers act during downward trends helps me judge the health of a stock. It is important to always be researching and taking notes (even on down days) because you never know what clues the market is trying to leave behind.
And the next rally higher could begin at any time.
Your Profit Pilot, TG